Interesting story here about a new partnership between Coke and Spotify, that promises to “provide consumers universal access to music”. The partnership will focus on four key pillars: global, technology, social, and a commitment to music. Spotify explained that Coca-Cola will be a huge factor in bringing Spotify to new markets and new corners of the world.

In 2011, Coke launched Coca-Cola Music, and 2013 will mark the evolution of that program. Spotify will be at the core of it. The new app will be unveiled for the 2012 Olympics in London.

Here’s the gist of the partnership: Coca-Cola plans to “invite consumers into Spotify through live events, TV, digital media,” and through the new app. In return, Coca-Cola gets kudos from fans for sponsoring an up-and-coming tech startup that puts music in the forefront. Considering the Coke Facebook page has over 41.5 million likes, this could indeed be a game changer.

Reaction to the announcement has been mixed. Some are of the opinion that this sort of partnership is exactly what Spotify needs to break to a larger audience around the world. Others, however, feel that this will create a more deeply-branded and heavily advertised music experience, which consumers will reject.

For now, I agree with music/tech writer David Chaitt, who notes that “Coca-cola needs to improve the Discovery and Amplification experiences of listeners without inauthentically injecting their beverages into conversation.” Otherwise, this thing will take off like a lead balloon…as the saying goes.

 

- Kurt Dahl, April 24, 2012

A very common question I get asked by my musician clients is whether they should give up part of their songwriting to the producer of their upcoming album/EP/single.

This question brings up a key distinction to be drawn between the songwriting copyright and the sound recording copyright (see my last blog for more on this).

Traditionally, artists would give producers 2-4 “points” on a record, which in simplified terms means that 2-4% of revenues generated from the sale of records would go to the producer. Only the sound recording copyright is involved here.

These days, as records sell less and less, I see more producers asking for a portion of the songwriting copyright. In some cases, this is justified…as the producer actually participates in the songwriting process and provides more than ‘producing’ duties…by adding melodies, harmonies, rhythms, song structure and/or instrumental arrangements. In other cases…is it totally unwarranted!

Now, the million dollar question is: where is the line drawn between producing and writing? You as artist are paying (and likely a significant fee) to obtain the various services that a producer offers, which may include some arrangement of your songs among other things. But does this arrangement constitute songwriting?

For example, if a producer changes a single chord in the chorus, is that songwriting? If he/she contributes all the lyrics to said chorus, is that songwriting? In my opinion, the answer to the former is no and latter is yes, but often the producer’s contribution is somewhere in between these two extremes. So it is a definite gray area.

What does the law say? As per the Sarah McLachlan case (see Neudorf v. McLachlan et al, BC Supreme Court), there must be proof of mutual intent between artist and producer that co-authorship will take place, and evidence that such co-authorship did indeed occur. So bands and producers are going to sit down and discuss all this important stuff beforehand right? Right. I won’t hold my breath.

In the meantime, just know that as an artist, you should not be giving away any of your songwriting unless real co-writing is happening with your producer. Now, how to define that co-writing is another thing…

As always, email me at kurt@bcmusiclaw.com with any questions.

- Kurt Dahl, March 28, 2012

Most artists I talk with have a difficult time understanding the different copyrights and revenue streams that flow from their songs. And I don’t blame them. Our copyright system has developed in bits and pieces over decades, so there are layers of complexity that still confuse me (only once in awhile though, and early in the morning).

In every recorded song there exists two copyrights: one in the written song itself (the songwriting copyright) and one in the recording of the song (the sound recording copyright).

The revenue streams generated from the songwriting copyright include performance royalties (from radio play, live performance of the song, etc…your SOCAN cheque), mechanical license royalties (a fee paid per song for every copy of the song made), synchronization fees (if the song is ‘synched’ to film or television), as well as others.

The revenue streams generated from the sound recording copyright include record sales revenue (both digital and physical), and master use license fees (to use the actual recording of the song in film/tv/etc.).

When you sign a publishing deal, you are dealing with your catalog of songwriting copyrights. When you sign a record deal, the label is acquiring rights to the sound recording copyright.

In the pre-internet, pre-Napster world, the sound recording copyright generated a great deal of revenue, as records sold a lot more, record deals were aplenty,  and all was good (not really, but you knew that). As the Dylan song goes, things have changed. To say that the sale of recorded music has taken a major hit is the understatement of this blog series. However, while the sale of music has gone down, the overall use of music (in film, tv, radio, internet, in restaurants, at sporting events, etc.) has never been higher.

What this means is the songwriting copyright has never been more important, as it generates revenue from the use of music, more than its sale.

So what does this mean for you as an artist?

First, the ability to write songs has never been more valuable.
Second, while everyone thinks of a record deal as the main indicator of success, a strong publishing deal may earn you far more money and open a lot more doors in the long run.
Third, be very careful when signing anything that mentions publishing or songwriting or an assignment of any rights as a writer.
Finally, while artists like Elvis and Frank Sinatra used to make a very good living performing/recording songs written by others, in today’s industry, those that can write their own songs (and put on an exceptional live show) are much more empowered to make a living from music. So long story short…keep writing.

Email me at kurt@bcmusiclaw.com if you have any further questions, I’d be glad to help.

- Kurt Dahl, March 6, 2012

In a submission made here, the RIAA recently named the countries that it says “fail to provide adequate and effective protection for U.S. intellectual property”. The major offenders? China, Russia, India, and yes…Canada.

The report notes that “USTR placed Canada on the Watch List for making ‘little headway in addressing long-standing intellectual
property issues related to copyright and patent reform such as ratification of the WIPO Internet treaties.’ Furthermore, USTR
noted that ‘progress has stalled on the outstanding issue of national treatment of U.S. artists in the distribution of proceeds from
Canada’s private copying levy and its ‘neighboring rights’ regime.’”

The report comes at an important time in Canada’s ‘battle against piracy’, as an amendment to the Copyright Act is looming, and the opinions on either side of the debate seem to get more polarized.

- Kurt Dahl, Feb. 21, 2012

I’ve been hearing a great deal of opinions on both sides of the SOPA debate, and wanted to add my two cents. While the defeat of SOPA was celebrated as a “populist” victory online, it is worth examining from another angle. To me, the debate really seems like a battle between the tech and music industries.

On the tech side, the argument is that if we start to crack down on illegal downloading through legislation like SOPA, the slippery slope would lead to the closure of wonderful sites like Wikipedia and Google, and Big Brother would have won. However, the tech industry is enormously powerful, and almost always beats the far smaller creative businesses in legislative disputes. Google alone generated more than $37 billion in 2011, more than double the revenue of all record companies, major and indie combined. So who are we really protecting?

A common myth is that all record companies exploit every artist they sign, and that file sharing takes money from the big bad labels and creates much needed (and much wanted) exposure for the artist. Everyone wins, right? The image below has come across my desk several times in the past few months:

This is classic disinformation. Most record deals I negotiate involve a 50/50 split between label and artist. While record label horror stories exist for good reason, many deals today benefit from years of mistakes and exploitation of artists. In other words…artists are smarter now, and the money is tighter, so both sides really have to work together if either wants to survive.

If there are artists signing deals like the one in the above graph, they didn’t call me first. Most sign modest deals, live modest lives (at least financially), and rely on income from touring revenue and music sales.

While the SOPA legislation was flawed, at least part of the intention was in the right place: to compensate artists more fairly, while stopping sites like Megaupload etc from making millions from selling pirated content. As a closing thought, it is worth contemplating that Megaupload.com’s Kim Dotcom, who was arrested in New Zealand last week in his 25,000-square-foot compound surrounded by a fleet of Mercedes and Ferraris, made his fortune from selling content stolen from artists. So who is the real bad guy?

- Kurt Dahl, Feb. 3, 2012

Just read a couple interesting and promising articles regarding the current state of music sales and music consumption.

The first, from Hypebot, indicates that digital music revenues to record companies grew by 8 per cent globally in 2011 to an estimated US$5.2 billion. This compares to growth of 5 per cent in 2010 and represents the first time the year-on-year growth rate has increased since IFPI started measuring digital revenues in 2004.

The second, from Music Think Tank, summarizes several stats from Nielsen Soundscan, some of the most interesting are:
- US album sales were up 1.3% last year, the first year since 2005 that’s happened. 66% of these sales were CDs.
- Rock is the most popular genre of music, with 32 percent album share, while pop music represents 40 percent of all current digital tracks sold.
- Ninety-three of the 100 best selling vinyl albums in 2011 fall within the Rock or Alternative genres.
- Vinyl sales increased 37 percent in 2011, but only accounted for 1.2 percent of all physical sales.
- 75% of all CD sales were made offline. That means that people physically purchased the CD at a brick and mortar store or an event.
- There were 249 million albums sold in the US last year. People will tell you that the music industry is dying, but 249 million of anything is still a huge number.

Both articles are a breath of fresh air amidst all the doom and gloom that currently dominates any music biz discussion. Also, the stats indicate two key points worth repeating:

- rock and album sales are tied together
- pop and individual track sales are tied together

While these correlations may seem trite, many musicians/managers/labels don’t seem to fully understand them. Too often I see rock acts focusing on the big ‘crossover’ pop single, or pop acts working on their concept album masterwork. Not saying there can’t be exceptions to the rule, but first and foremost there needs to be a real understanding of your genre and the demographic you are catering to. Some rock fans will want a chart-topping pop single, some pop fans will want an epic concept album, but 99% of the time the opposite will be true. That doesn’t mean you don’t take chances, but first you need to understand your audience.

Either way, some encouraging articles to start the year with.

- Kurt Dahl, January 23, 2012

On behalf of Bob and myself, Happy New Year to all our friends and clients!

2011 was a great year for D’Eith and Company, as our entertainment law practice saw its largest growth of the past few years and our consulting company, Adagio Music, saw a substantial increase in clients looking for help with Factor apps, other grant apps, and generally receiving advice about taking their careers to the next level.

As we look forward to our biggest year to date, I thought I’d post an interesting article from ‘the DIY Musician’, summarizing the top 10 blog posts of 2011. Some great reading for all our musician clients…everything from search engine optimization to band politics to being ripped off by clubs. All the good stuff! Check it out here.

See you all in 2012

- Kurt Dahl, January 4, 2012

Just read an interesting article here about the Black Keys’ refusal to make their new album ‘El Camino’ available for streaming on Spotify. According to Keys drummer Patrick Carney, “for a band that makes a living selling music, it’s not at a point where it’s feasible for us”.

The article points out that it takes about 64 streams to equal one 99-cent iTunes purchase, and this has prompted artists such as Adele, Coldplay, and Tom Waits to keep their new albums off Spotify, at least for the first few months following release.

Spotify has responded that the company continues to make concerted efforts to create a forum for music via social media (hence their partnership with Facebook) and foster live music (free shows they have sponsored at Mercury Lounge in New York City over the summer). But while some artists praise the service for embracing the new cloud reality, others oppose the miniscule Spotify payouts in relation to payouts generated from the more traditional digital purchase model.

The debate as to whether Spotify is a benefit or harm to artists continues. We’d be interested to hear your thoughts…post them on the D’Eith and Company and/or Adagio Music Facebook pages.

- Kurt Dahl, Dec. 14, 2011

Here’s a little tidbit of info that most of you perhaps didn’t know: D’Eith and Company acts as the head office and records office for over 80 BC companies, ranging from incorporated bands/artists, studios, management companies, record labels, and corporate holding companies.

Why would you want to incorporate your business entity you ask? The first answer is tax benefits. As an example, if you are in a band and are starting to generate income consistently on a monthly basis, you may be able to achieve significant tax breaks by writing off your band expenses (and there is never a shortage of those) against any income made. If you are a management company or record label, these benefits are magnified.

The second benefit is the limited liability provided by incorporation. So if your band/studio/management company gets sued for whatever reason, you as an individual will be safe from liability, i.e. the liability stays with the corporation. If your business entity is making any sort of profit on a regular basis, this benefit cannot be overstated.

The costs to incorporate are completely reasonable, and Kurt can explain all the benefits and provide advice based on your specific situation over the phone. Once he has all the relevant info, you could be incorporated in a matter of weeks, and start making the most of your business in no time.

Give us a shout at 604-675-6227 to discuss, we’d be glad to help.

- Kurt Dahl, Dec. 7, 2011

Just read a great article here from Music Think Tank about ‘the best kept secret for advancing your music career’. The writer asks what is the best way for an up and coming band with some buzz to spend $5000 to advance their career. Advertising? Touring? Radio promotion? Publicity? Nope, none of the above.

The answer: hire an entertainment lawyer.

If you are surprised, you are not alone. In fact, I think it’s safe to say that many musicians don’t discover the benefits of a music attorney unless prompted to for negative reasons. But the positives are far more abundant!

The author goes on to say that “in the world of entertainment, the attorney is king in many ways…they are the silent force behind every deal and advancement…the music industry’s silent gatekeeper and its best kept secret”.

So, have a read of the article, and shoot us a phone call or email. Whether it’s getting more out of your career/catalog, negotiating you a better deal, or offering guidance in any area of the business, we look forward to sharing this ‘secret’ with you.

- Kurt Dahl, Nov. 22, 2011

 

Just read an interesting article here about electronic music distributor STHoldings pulling all its distributed labels from streaming music services Spotify, Simfy, Rdio and Napster. The reason for the pull: a recent study concluded that music streaming and other free or low cost online music services “are more likely to cause listeners to continue to stream songs, rather than buy them”.

ST’s clients include some 238 labels around the world.

This raises a huge question going forward, one we have touched on before: is Spotify good or bad for artists? The above study concluded that Spotify and other streaming services have the effect of devaluing music by exploiting it as a low value/free commodity, with the end result being less and less music being paid for, and of course, less money to artists.

The counter argument is that if more artists, labels, and consumers got on board with Spotify, there would be a snowball effect in the coming years, and far more revenue and value would accrue to artists from streaming vis-a-vis the rapidly dwindling revenue flowing from more traditional ‘purchase’ services such as iTunes.

As always, consumer choice will point the direction forward. And based on the numbers in the above study, consumers have made one thing clear: they want Spotify. The question is, do artists?

- Kurt Dahl, Nov. 16, 2011

 

FACTOR has extended the deadline for Juried Sound Recording and Demo Applications from Oct 28, 2011 to Nov 30, 2011. On our consulting side of the company (Adagio Music), we offer comprehensive services in relation to FACTOR grant applications, and have a pretty strong track record in terms of approval.

So if you’d like Bob and I to help you take your application (and career) to the next level, shoot me an email at kurt(at)bcmusiclaw.com. We need at least 3 weeks advance to do the app properly, so hit me with an email and we’ll make it happen!

- Kurt Dahl, Nov. 2, 2011

Many of you may already be using this service to track the data of your band, or someone else’s band. However, I meet many artists who are not yet benefiting from the service known as Next Big Sound.

It’s free for the regular version, $79/month for the premier version (still in beta, but I keep hearing great things), and it’s a one stop shop to measure, track, and understand the performance of your band online (which of course is directly connected with your performance offline).

Any time I hit the road with my band on tour, we inevitably tweet more, post more videos, and make more new fans than any other time of the year. And without fail, the following week when my NBS report comes in, all our numbers have shot up. Clearly, the key is to use these metrics to better understand how to operate as a band in order to maximize exposure to your fans, give these fans what they want, and gain more fans along the way.

Promoters, labels, management companies and all other ‘music industry professionals’ are using this tool more and more, so if you are not yet hip to it, I’d suggest getting on it.

Start harnessing the power of your metrics now…

- Kurt Dahl, Oct. 19, 2011

Found a great article here that breaks down the actual revenue streams flowing to artists from digital sales and streaming sites. The actual payment per play from a service like Spotify seems shockingly low in comparison to the revenue generated from a sale on iTunes. In fact, many indie bands have reacted strongly to the article, suggesting Spotify profits off the use of indie acts, while not adequately compensating them.

To me, the real issue here is one of volume, and understanding the changing consumption habits of music fans. Less and less music buyers want to ‘own’ their music, choosing instead to merely access it in the cloud, at their leisure. What is the ‘value’ of granting such access? Clearly it must be a lot less than 99 cents, or Spotify would have no business model. And while the per-play payout put forth in the above article seems low, the more people embrace streaming services like Spotify, the more revenue it will obviously generate. If we are truly moving to a cloud-only music world, we would be looking at millions of plays an hour…which could really start to add up for acts that are somewhat ‘visible’.

In the end, we are left with the same music industry conundrum: the big acts keep getting bigger, and everyone else fights for recognition.

- Kurt Dahl, Sept 29, 2011

I’m proud and excited that my friends in the Sheepdogs made the cover of the Rolling Stone! check out the article here.

I have been lucky enough to help them on the legal side of things over the past few months as things have developed, and look forward to doing much more for them as they take things to the top.

- Kurt Dahl, August 16, 2011

 

The first big headline that came across my inbox this past month was that HMV has sold all of their 121 Canadian stores to a ‘restructuring specialist’ for a measly $3.2 million. Times surely are changing…$3.2 million used to be a drop in the bucket in the CD-focused music industry of the early 90s…now it can buy you an entire chain of music stores!

The second major headline was that Spotify has now launched in the U.S., to much fanfare. And for good reason…the service seems to point the way forward for streaming music. There are still growing pains associated with the service (it is currently difficult to sift through, is often missing songs from certain albums, and frequently contains multiple versions of the same song), and it is currently unavailable in Canada (however, simply Google ‘how to use Spotify in Canada’ and you will discover a workaround!). That being said, the service promises to be a game changer in terms of how music is enjoyed on a daily basis…without overloading one’s hard drive.

What is so great about it? Unlike Last.fm or Pandora which only allow you to stream genres of music, Spotify lets you pick and choose whatever song you want without having to pay a dime. The only catch with the free version is that is that it’s ad-supported and you have to put up with ads in the program browser. It also doesn’t allow streaming to portable devices.

The elephant in the room: will services such as Spotify sufficiently compensate the artists creating the music? At this early stage, the numbers seem to point to a strong ‘no’: a recent study found that artists received as little as 1/10th of a cent per stream. By comparison, artists and labels usually collect about 70 percent of the amount paid for a download from iTunes or a similar service – that’s 70 cents, assuming the track costs a dollar.

But looking big picture, and a few years down the road when everyone is enjoying music in the cloud, and enjoying a huge amount of said music…you can see a light at the end of the tunnel. I guess that is the key…realizing that the industry will never go back to the overinflated, overindulgent days of the CD…and that revenues will accumulate from millions and millions of minuscule transactions, rather than the old $18/CD transactions that used to be the backbone of HMV and other record stores.

So if streaming a large amount of music becomes a daily routine for the average music fan, the revenues may start to add up and end up in the pockets of artists. Will this bring back the sort of revenues that were flowing at the height of the CD era? Definitely not. But it is an encouraging move in the right direction…

- Kurt Dahl, July 27, 2011

Just read an interesting article here on how music in the cloud is the future, and how this may result in increased compensation for artists. However, what is equally interesting is one of the responses posted below, from ‘Mr. Cranky’, who argues against most of the points raised in the article.

The response post suggests that charging a levy on all smartphones and PDAs sold would unjustly penalize users who don’t steal music, which is an argument that has been around since the levy debate began.

However, the response post also suggests that the lack of success of music subscription services is a result of ” the current lack of cultural importance of music than any particular failing of the services”. This is where I disagree. The use and enjoyment of music in our society seems to be at an all time high, as music is permeating more aspects of our lives than ever before. I recall reading an article last year that music is used more per day by more people than ever before. It is simply that no one is paying for it. The million dollar question that plagues the industry is ‘how do you compete with free?’, and up until now, no valid answer has been provided.

So, we know two things: i) use of music is at an all-time high, and ii) the ability to store and access music is becoming infinite. Now, I would be fool to proclaim the answer to the million dollar question, but one thing is sure: it lies in connecting the above two trends…and making the nearly infinite storage and use of music seem like it is free. Will this restore artist compensation to the (over-inflated) levels reached at the peak of CD sales? Clearly not. But it would be a start.

Kurt

Bob and Kurt are entertainment lawyers with extensive experience drafting/reviewing all forms of contracts related to the entertainment industry. Some contracts that the firm has been working on a lot lately include:

- management contracts
- license agreements
- publishing deals
- investment agreements (to secure funding for your next album/project)
- record deals
- band agreements
- producer agreements

Email us for a quote, and we would be glad to help! Whatever you do, don’t just sign without getting advice first! Click on Legal Services above for more.

 

One of the most important and affordable agreements a band or group of musicians can have is a Band Agreement. Whether you are just starting your career, or are on the verge of taking things to the next level, you need this simple agreement.

It deals with: who owns the songs, who owns the band name, how decisions are made, how money is split, and much more.

Many of the legal disputes that come across our desk could have been avoided with a solid Band Agreement.

Have a look at Kurt’s article on Band Agreements here to find out more.